Can you be charged for unwittingly committing card fraud?

People unwittingly commit credit card fraud every day, and sometimes their actions can have unexpected consequences.

As a CreditCards.com advice columnist, I get questions from people who have gotten themselves into all kinds of situations where they are afraid they are in danger of being charged with credit card fraud, and could possibly land in jail.

These readers don’t think of themselves as crooks. The people who steal strangers’ cards don’t seek my advice. The ones I hear from get into trouble in other ways. Maybe a boyfriend lets his girlfriend use his card, and now they disagree about how much she could charge with it. Or a parent may have died, and an adult daughter keeps using her mom’s credit card and added to the balance so much that she now can’t pay the bill.

There are many ways to get into legal trouble with credit cards without intending to break the law. Here are some readers’ stories, and what the results will likely be.

Forgetful alcoholic, vindictive ex cry fraud

Credit card disputes between romantic partners are a common theme from people who worry about going to jail for credit card fraud.

For example, here are two scenarios culled from CreditCards.com reader emails:

“My ex-husband, a 75-year-old alcoholic, told me to fill out a credit card application in his name, and then gave me the card. Now that I have my own apartment and a boyfriend, he has signed papers saying he doesn’t know anything about the credit card. What do I do? I’m scared to death.”

“My ex-boyfriend told me to use his debit card and gave me his PIN. I had text messages with him saying to keep everything and that I didn’t have to pay him back, but I mistakenly deleted them. He’s saying he’s gonna get me for fraud and have me thrown in jail for four years. I have a recording of him saying if I tell the truth about cheating on him, he won’t proceed with the charges.”

Will either person face jail time? Philadelphia criminal defense attorney Zak T. Goldstein, of Goldstein Mehta, handles cases like these frequently. He says a person is not likely to attract much interest from the police over minor credit card disputes between family or romantic partners.

While it is a crime to use a credit card without the owner’s permission, authorities are unlikely to get involved unless “the amounts involved are either incredibly high (somewhere in the hundreds or thousands) or when there is some sort of link to a ring of credit card fraud,” says Goldstein.

South Carolina attorney Stephen Lesavich, credit card expert and co-author of “The Plastic Effect: How Urban Legends Influence the Use and Misuse of Credit Cards,” warns that the person who lends someone a card and then turns around and accuses that person of fraud may be the one getting in trouble.

“By giving his girlfriend permission, he likely breached the terms of his credit card contract,” says Lesavich. “Many credit card contracts have provisions for this situation. In those contracts: 1) the boyfriend would likely be liable for all charges his girlfriend made on the card because he gave permission; 2) he would lose the right to dispute the charges because he gave permission to his girlfriend; and, 3) the card issuer may also decide to cancel the card.”

You had permission to use the card, but not go on a shopping spree

What happens when you admit you gave someone permission to use your card, albeit for one purchase?

One reader shared how his girlfriend gave him her credit card number over the phone to pay rent while she was away. He wrote:

“Now she is suing me for 17 charges I made. Will I go to jail, or can I just pay her back?”

Another reader dated a guy who gave her his gas card and told her to fill up the car. She admits she not only filled up her car, but she took several hundred dollars out to pay bills and for spending money. She wrote:

“When I didn’t spend New Year’s Eve with him, he became angry and accused me of credit card fraud. Can I go to jail?”

Whether you spent more than you clearly had permission to, you can use the defense that you had permission.

“The fact that there was a relationship, especially if they lived together, gives her the creditability she needs to defeat the accusation,” says bankruptcy and divorce attorney Eric N. Klein of Klein Law Group in Boca Raton, Florida.

It also matters how you got the card. Klein says, “Did the boyfriend physically give her the card or give her the card information? If so, he gave her permission to use the card. Even if her name is not on the card, she is safe from prosecution.”

Another point is whether the cardholder benefited from your use of the card. Klein asks, “Did she buy groceries or sundries for both of them? Did she book a cruise that they both went on together? If he received a benefit, he will lose.”

As with the first scenario, you’re not likely to be prosecuted over minor disagreements about how much you were supposed to use a credit card that was lent to you.

“Neither banks nor credit card companies are interested in prosecuting anyone. They just want to get paid. Legal issues, courts and lawyers are the last thing they want to deal with,” says Robert Siciliano, identity theft expert and CEO of IDTheftSecurity.com.

A cardholder dies, but you continue to use their card

It’s one thing to be an authorized user on someone’s credit card. It’s another thing to keep using the card after that cardholder dies. That’s what some readers have confessed, and they worry about the consequences.

It happens more than you think, judging by the number of questions I get on the topic. One reader wrote:

“I think I did something illegal. My husband had a company card and I was paying the bill, and I never thought to tell them he died. I just kept using the card, but now I can’t pay. What should I do?”

Or this from an authorized user:

“About two years ago, my mother passed away. I didn’t contact the credit card company. I’ve maxed the card out with a high balance and can’t make the payments. Now what?”

“That really is fraud and it is likely to draw serious scrutiny from law enforcement,” says Goldstein. “Certainly, the scrutiny will be less if you continued making payments on the account, but that is just something you do not want to be involved in.”

Whether the bank prosecutes you depends on the bank. “If the credit card use was, say, less than $2,500, the bank may not bother,” says Klein.

The card issuer does not have a contract with you when you use a deceased person’s card, so you cannot be sued under the terms of the credit card contract. However, you did incur a debt illegally. “In this situation, the person using the dead person’s card may have a de facto contract with the credit card issuer that they could be sued under,” says Lesavich.

You should be aware of potential state as well as federal criminal and financial fraud statutes you may have violated, Lesavich says.

If you used a credit card after the cardholder died, you should pay off the card if you can. Lesavich says you should then inform the card issuer in writing that the person is deceased, without making any admissions of any kind.

If you’ve been using the card for your personal expenses for a period of time, and now you cannot pay off the balance, you may need to come clean. For example, if you used your dad’s credit card for months or years after his death, Klein recommends you immediately call the bank, ask to speak to the fraud department, and offer a plan to repay the debt.

How to keep from being charged with credit card fraud

The easiest way to avoid being charged with credit card fraud is to keep your finances simple and separate from anyone else’s, with the exception of a trusted spouse.

If you need to use someone’s credit card, be careful. Goldstein says, “If it’s the occasional small purchase in an ongoing relationship, you probably do not have a lot to worry about.”

For more than occasional use, consider asking the person to add you as an authorized user.

“If you’re going to be making large purchases, it never hurts to document that you have permission upfront,” says Goldstein. “I don’t mean you need a formal, signed contract. You could shoot your girlfriend a text message that you’re about to use the card to purchase the treadmill for $1,000 and make sure it’s OK. Take a screenshot, and save it to a cloud-based email system.”

Written permission is your best protection against misunderstandings and accusations later on.

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